Boeing Co (BA) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amid Tariff Challenges

GuruFocus News

Thu, Apr 24, 2025, 12:05 AM 4 min read

Revenue: $19.5 billion, up 18% driven by higher commercial delivery volume.
Core Loss Per Share: $0.49, a significant improvement compared to last year.
Free Cash Flow: Usage of $2.3 billion, reflecting higher commercial deliveries and improved working capital usage.
BCA Revenue: $8.1 billion with an operating margin of minus 6.6%.
BCA Deliveries: 130 airplanes in the quarter.
BCA Backlog: $460 billion, up more than $25 billion sequentially.
BDS Revenue: $6.3 billion, down 9% on planned lower volume.
BDS Operating Margin: 2.5%, up 30 basis points compared to last year.
BGS Revenue: $5.1 billion, stable year-over-year.
BGS Operating Margin: 18.6%, up 40 basis points compared to last year.
Cash and Marketable Securities: $23.7 billion.
Debt Balance: $53.6 billion, down $300 million.

Warning! GuruFocus has detected 4 Warning Signs with BA.

Release Date: April 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Boeing Co (NYSE:BA) delivered 130 airplanes in the first quarter, exceeding internal expectations.
The company won the F-47 program, securing its position in the sixth-generation fighter market.
Boeing Co (NYSE:BA) reported an 18% increase in revenue, driven by higher commercial delivery volume.
The company is on track to increase 737 MAX production to 38 per month, with plans to further increase to 42 per month.
Boeing Co (NYSE:BA) completed the 100th 767 freighter conversion, marking a significant milestone in its BGS business.

Negative Points

Boeing Co (NYSE:BA) is facing potential challenges due to tariffs, particularly affecting deliveries to China.
The company reported a core loss per share of $0.49, despite improvements from the previous year.
Free cash flow was a usage of $2.3 billion in the quarter, reflecting ongoing financial pressures.
Boeing Co (NYSE:BA) continues to face seat certification issues affecting some 787 deliveries.
The company is managing risks related to retaliatory tariffs and input costs, which could impact future financial performance.

Q & A Highlights

Q: How is Boeing interacting with Washington to address the tariff environment, and what are the expectations for resolving these issues? A: Kelly Ortberg, President and CEO, stated that Boeing is actively engaged with the administration, including cabinet secretaries and the President, to emphasize the importance of a tariff-free environment for the aviation industry. Ortberg expressed hope for negotiated agreements to resolve the tariff issues, particularly with China, and emphasized the need to manage the situation proactively to avoid impacting Boeing's recovery and production stability.

Q: What are Boeing's delivery expectations for the 737 and 787 programs, considering the impact of China tariffs? A: Brian West, CFO, confirmed that Boeing still expects to deliver around 400 737s and approximately 80 787s this year. Despite the potential impact of China tariffs, Boeing had a strong start to the year, which should help offset any delivery pressures. The company plans to ramp up production rates for both programs in the coming months.

Q: Can you provide details on the financial impact of tariffs on Boeing's supply chain and the potential cost implications? A: Brian West explained that the net annual impact of higher tariffs on input costs is manageable and within Boeing's plan, estimated at less than $500 million annually. Boeing is leveraging duty drawback opportunities and working with suppliers to mitigate cost pressures. The company is confident in its ability to manage these impacts through established trade and supply chain strategies.

Q: What is the status of Boeing's key performance indicators (KPIs) for the 737 and 787 programs, and how is the company addressing supply chain risks? A: Kelly Ortberg reported that the KPIs for the 787 program are all green, indicating stability. For the 737 program, rework is still being reduced, but progress is on track. Boeing is actively managing supply chain risks, including the impact of the SPS fire, and expects to maintain production continuity without significant disruptions.

Q: How does Boeing plan to manage production rate increases, and what role does the FAA play in this process? A: Kelly Ortberg stated that Boeing will work closely with the FAA for each production rate increase, ensuring stable KPIs before proceeding. The company plans to increase rates in increments, with a focus on maintaining stability. The FAA is involved in reviewing metrics and ensuring compliance with safety and quality standards.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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